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To: FR1 who wrote (1175)	10/15/2000 5:19:57 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 1471

No so, FEDs have been repo-ing all the juicy treasury bonds, especially those which had coupons attached for interest payments or higher interest rates up to 22% which Japanese bought during Volker years. As you know, the repo's reduce national debt and yearly budget requirement. Japan started buying in the early 1970s at 9% up to 1981 at 22%. Their total amount is still $1.3 trillion dollars(Bonds lock up cash for a number of years, in order to use cash they can borrow on the bonds or sell the bonds outright). So, it is around an average of 15%, which interest(order of magnitude estimate) costs our government slightly less than $180 billion each year in our budget. We love to buy them back by printing some money. When government has less deficit, interest rate goes down. Printing money for a bigger economy is all in the loose monetary policy that we have to have to foster growth.